What does the Cost Inflation Index (CII) help to achieve in the context of long-term capital gains tax? Option: Determine the lock-in period for investments, Increase the taxable amount, Calculate the total investment value, Reduce the taxable amount by factoring in inflation

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What does the Cost Inflation Index (CII) help to achieve in the context of long-term capital gains tax?

Determine the lock-in period for investments

Increase the taxable amount

Calculate the total investment value

Reduce the taxable amount by factoring in inflation

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How does the CII help reduce tax liabilities for assessees on long-term capital gains (LTCG)?

It increases the tax rate on short-term capital gains, making LTCG more favorable

It allows for the adjustment of the asset's purchase price based on inflation, potentially lowering the taxable gain

It provides a flat tax deduction on all LTCG

It exempts LTCG from any taxation

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What is the impact of applying the Cost Inflation Index (CII) on capital gains?

It stabilizes capital gains

It increases capital gains

It reduces capital gains

It has no impact on capital gains

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What is the purpose of the Cost Inflation Index (CII) in calculating capital gains from foreign stocks?

To calculate the TCS on foreign investments

To convert foreign currency gains into Indian rupees

To adjust the purchase cost for inflation

To determine the applicable tax slab rate

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What is the purpose of indexation in capital gains calculations?

To predict future market trends

To determine the fair market value of assets

To increase the tax burden on investors

To adjust for the effects of inflation

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What is the key difference in calculating long-term capital gains (LTCG) compared to short-term capital gains (STCG)?

"LTCG calculations consider the Cost Inflation Index (CII)"

"STCG calculations are based on the initial purchase price only"

"LTCG calculations exclude brokerage fees"

"STCG calculations incorporate inflation adjustments"